Amazon to Pay $3.95M to Settle Lawsuit Over Misused Driver Tips

The settlement resolves allegations that Amazon used customer tips to subsidize driver wages without proper disclosure from 2016 to 2019.

Amazon agreed to pay $3.95 million, including $2.45 million in penalties and $1.5 million in costs, to settle the lawsuit filed by the D.C. Attorney General's office.
The lawsuit alleged that Amazon misled customers and used more than $1 million in driver tips to cover base wages, increasing its profits and lowering operating costs.
The company changed its tipping policy in 2016 without informing drivers or customers, contrary to its earlier promise that 100% of tips would go to drivers.
Amazon ceased the practice in 2019 after becoming aware of an investigation by the Federal Trade Commission (FTC), which led to a restitution-only settlement in 2021.
As part of the new settlement, Amazon denies wrongdoing but has committed to maintaining transparent tipping practices and disclosing any future changes clearly to consumers and drivers.